Federal Dollars Flow Elsewhere

Michigan lacks state, local funds for federal grants and total success

General Motors’ Renaissance Center (background) is a symbol of Detroit’s coming revival. New, sleek rapid buses running in their own lanes also will promote the city’s revitalization once support from regional and state leaders is strong enough to draw federal grants to the new regional transit plan.

Michigan and its leading cities — Detroit and Grand Rapids — lag woefully behind their peers across the nation in securing the final piece of the transit puzzle: Federal support. Grants for public transit from the U. S. Department of Transportation are essential to building and expanding bus and train services. Federal “New Starts” money, for example, funds up to 80 percent of the construction costs of new transit systems.

Michigan, however, recoups an average of only 42 to 48 cents on every dollar of transit taxes the state’s residents pay each year to Washington D.C. The reason is too little local transit activity and not enough state commitment to providing cash and other assistance to metropolitan transit efforts.

To obtain significant federal transit funding, cities must have credible plans and local funding options to build or expand rapid transit systems. Further, states must be willing to help lobby for federal aid, as well as provide matching funds to get it.

The good news, however, is that Detroit and Grand Rapids are beginning to lay plans for rapid bus and train service in their regions. This progress should challenge the state to step up its support for transit, as well.

Michigan and its metro areas can build on new local transit momentum to secure critical federal dollars and move the state’s bus and train systems into the 21st century. They can do it, however, only if they work as a team to leverage significant federal grants.

Federal Fast TrackAmong the 12 states analyzed in this report, Michigan ranks 10th in per capita federal transit funding received in 1999-2000. Michigan’s loss is other states’ gain.

National transit leader New Jersey receives four times as much federal support per resident than Michigan. Midwest neighbor Illinois receives about three times more, including $80.5 million of New Starts money in 2000 for new transit projects. Michigan received no New Starts money.

Even Texas, which supplies very little state money to local transit agencies, is able to outpace Michigan in landing federal transit funds. The reason is that Texas’ largest cities — Dallas and Houston — have gone forward, despite minimal state assistance, to develop broad local support for financing rapid bus and rail programs.

Keen CompetitionMichigan’s two largest cities fare even worse than the state as a whole in their ability to secure federal monies for transit. Detroit ranks 17th among the 22 metropolitan areas studied and Grand Rapids 20th in leveraging federal funds.

The failure of Michigan and its cities to pull in federal funds is a key reason Michigan’s transit systems are far behind those in other states, where world-class transit is becoming a key component of economic development planning. Detroit, for example, remains the nation’s largest metropolitan area without a rapid bus or train line. Detroit’s lack of modern transit is significant not only for those locally who cannot drive and desperately need it but also for frustrated commuters and for taxpayers throughout the state.

In contrast to leaders, such as Pittsburgh, which ranks second in per capita federal funding in 1999-2000, Michigan’s cities have not yet put viable transit expansion plans before federal funders. Of the total $81.6 million in transit funding that Pittsburgh received from Washington D.C., half went to improving infrastructure, constructing new rapid transit systems, and expanding fleets.

From Miami to Memphis and from Portland to Pittsburgh, cities across America in the 1990s planned or constructed express bus and train service to cut through gridlock, clean the air, and compete for commercial investment. In the Midwest alone, Chicago, Cleveland, Minneapolis, and even smaller cities like Racine, Wisconsin, now have rapid transit systems on the ground or in the works. All are speeding by Michigan in the pursuit of their share of federal transit funds for stronger economic competitiveness and a higher quality of life.

Michigan can stop exporting its federal transit taxes to other states’ projects by placing a higher priority on developing workable plans for rapid transit. Such plans will help Michigan contend for federal funding, as well as recruit new businesses to its major metropolitan areas.